EXPLANATORY STATEMENT
Statutory Rules 1989 No. 300
Issued by the Authority of the Attorney-General
Futures Industry Regulations (Amendment)
Subsection 160(1) of the Futures Industry Act 1981 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters that are necessary or convenient to be prescribed for carrying out or giving effect to the Act. Subsection 160(8) of the Act provides that the power of the Governor-General to make regulations shall be exercised only in accordance with advice that is consistent with resolutions of the Ministerial Council for Companies and Securities (the Council).
2. The Council was established under an Agreement between the Commonwealth and the States, executed on 22 December 1978 (the Agreement), that provides the framework for a co-operative Commonwealth-State scheme for a uniform system of law and administration in relation to company law and the regulation of the securities and futures industries in the six States, the Australian Capital Territory and the Northern Territory of Australia.
3. Under subclause 45(1) of the Agreement, the Council may consider a proposal for the amendment of regulations made under the Commonwealth Acts enacted for the purpose of the co-operative companies and securities scheme. Should the Council approve any draft amending regulation which gives effect to such a proposal, the Commonwealth is then required, under subclause 45(2) of the Agreement, to submit the draft regulations to the Federal Executive Council for making by the Governor-General.
4. The accompanying Regulations are in accordance with a resolution made by the Council.
5. The proposed Regulations are also expressed to be made under section 4 of the Acts Interpretation Act 1901. That section provides that where an Act that does not come into operation immediately upon its enactment amends another Act in such a manner that the other Act, as amended, will confer power to make regulations then, unless the contrary intention appears, that power may be exercised before the amending Act comes into operation. Any regulations made under section 4 of the Acts Interpretation Act 1901 take effect on the day on which the Act concerned comes into operation or on the day on which the regulations would have taken effect if the amending Act had been in operation when the regulations were made, whichever is the later.
6. It is proposed that Part 8 of the Co-operative Scheme Legislation Amendment Act 1989 (the 1989 Act), being the Part of the 1989 Act with which these proposed Regulations are concerned, be proclaimed by Executive Council Minute No of 1989 to come into operation on 1 November 1989.
7. The purpose of the proposed Regulations is to make changes of a technical nature to the Futures Industry Regulations. The need for the changes arises from amendments to the Act (made by the 1989 Act) which effect deregulatory reforms concerning the licensing of participants in the futures industry.
8. Details of the proposed Regulations are as follows:
Regulation 1: Principal Regulations
The “Principal Regulations” referred to are the Futures Industry Regulations.
Regulation 2: Application for licences may be in sealed envelopes
This regulation amends regulation 10 by omitting reference to licences of representatives of futures brokers and futures advisers as they will no longer be required under the Act. Instead of being required to be licensed, representatives will be required to hold a proper authority issued by their principal.
Regulation 3: Application for licence
This regulation amends the reference to the statutory provision to which Regulation 17 relates which is necessary because of minor structural changes to the Act. It also omits subregulation (2) of the Principal Regulations which relate to applications for representatives licences which will no longer be required under the Act.
Regulation 4: Application for variation of licence
This regulation repeals Regulation 18 which relates to applications by holders of representatives licences for variation of the licences. The repealed Regulation is no longer necessary because representatives licences will no longer be required under the Act.
Regulation 5: Annual statement required to be lodged by licensee
This regulation amends the reference to the statutory provision to which subregulation 21(2) relates which is necessary because of minor structural changes to the Act. It also omits subregulation 21(3) which relates to annual statements of holders of representatives licences which will no longer be required under the Act.
Regulation 6: Register of holders of proper authorities
This regulation repeals Regulation 22 of the Principal Regulations which relates to timing of the lodgement of annual statements by holders of representatives licences. The repeal is consequential upon the discontinuation of the requirement for representatives to be licensed.
This regulation also provides for two new regulations in place of the repealed regulation.
Proposed Regulation 22: Register of holders of proper authorities
Paragraph 78E(3)(e) of the Act requires that holders of futures brokers licences and futures advisers licences include in a register certain information concerning persons who hold proper authorities from them. Proposed Regulation 22 prescribes the date of birth of a holder of a proper authority to be one of the items which the register must contain.
Proposed Regulation 22A: Copy of register - prescribed amount
Proposed Regulation 22A prescribes the amounts which a licensee may require for a copy of the whole or part of the licensee’s register of persons who hold proper authorities.
Regulations 7 and 8: Changes to Forms
Regulations 7 and 8 make the following amendments to Forms in Schedule 2 that are consequential upon the discontinuation of the requirement for representatives to be licensed, reflect a structural change in the Act or require the provision of greater information:
• Forms 3 and 4-substitute references to the head provision in the Act to which the forms relate.
• Form 7 - omit certain items.
• Forms 5, 6 and 10 - are omitted.
• Forms 8 and 9 - change headings and certain items; add a new item requiring the names and number of holders of proper authorities from a licensee.